Industrial relations

The Group’s approach lies in involving workers and their representatives in the pursuit of company objectives, establishing a continuous dialogue with them.

The Piaggio Group acknowledges the role of trade union organisations and workers’ representatives and is committed to establishing relations with them focussed on attention, dialogue and a common understanding; in fact ongoing dialogue is considered as fundamental for finding the best solutions to specific company needs.

The Group’s approach lies in involving workers and their representatives in the pursuit of company objectives, establishing a continuous dialogue with them. The solutions and conduct adopted in various countries where the Group operates are in line with the social and institutional context, but are always consistent with the fundamental principles and overall needs of the Group.

Piaggio complies with the labour legislation of countries where it operates. The minimum notice to give in the case of major organisational changes depends on the country where the employee works and on local applicable legislation.

Italy

During 2018, dialogue and discussion continued with trade unions and workers’ representatives, with the aim of seeking shared solutions, in order to respond to market situations and to manage the effect of these on employees.

Collective bargaining has made it possible to identify shared management tools which are suitable for dealing with the consequences of the long-term crisis in the sector, safeguarding the skills present in the company, encouraging their use and preventing them from being lost.

The National Collective Bargaining Agreement (CCNL) is valid throughout Italy. In the case of major organisational changes, provisions of law and of the relative collective bargaining agreement are complied with.

In August 2017, the trade union organisations FIM, FIOM and UILM presented a platform to discuss an additional (second level) agreement for production units in Italy. Various meeting were held from 2017 onwards. Negotiations are still under way, involving trade union representatives from various sites (Pontedera, Noale, Scorzè and Mandello del Lario), and the provincial and national staff of industry trade unions.

As regards the Pontedera site, which is now fully established as a centre of excellence in innovation, research and design and in the production of vehicles and engines, a new trade union agreement was signed in October 2017 for the use of the Solidarity Contract from October 2017 to April 2018.

The Solidarity Contract was subsequently resumed, to run from November 2018 to March 2019.In February 2018, a mobility procedure was launched for 180 employees was accepted and started in order to downsize staff activities and structurally rebalance the production workforce.

The Scorzè site was involved in the Solidarity Contract in the first quarter of 2018, following the agreement signed in October 2017; at the end of July 2018, a further agreement for a Special Redundancy Fund for reorganisation was signed, ending on 8 January 2019.

The Ordinary Redundancy Fund was also used on a residual basis in June/July 2018.In October 2017, an agreed-on redundancy procedure was accepted and started for 70 employees in order to structurally rebalance the production workforce.

As regards the Mandello del Lario production site, the increase in production during summer 2018 was addressed with temporary employment contracts and flexible weekly working hours. The Ordinary Redundancy Fund was also used on a residual basis at the end of 2018.

Overall, episodes of industrial action were down on the average figure for previous years, although slightly up on 2017.This increase, concerning micro-conflicts within the company, only concerned the Pontedera site, with figures that are not significant and that mainly concerned the actions of just one trade union organisation.

The table below summarises the hours lost through strikes in 2017 and 2018 at different company sites in Italy:

2018

2017

2016

No. of hours lost due to strikes

general/category

1,400

1,100

19.151

company

14,526

9,877

9,913

Total

15,926

10,977

29,064

% hours lost compared to hours worked

general/category

0.07%

0.05%

1%

company

0.8%

0.50%

0.50%

of which Pontedera compared to hoursworked in Pontedera

0.89%

0.58%

0.61%

Total

0.83%

0.55%

1.50%

No. of days lost due to strikes

general/category

175

138

2,394

company

1,816

1,235

1,239

Total

1,991

1,373

3,633

A structured company welfare system has been established in Italy, with services that aim to increase the well-being of employees and their families, in economic and social terms. In particular, two childcare agreements are in place for employees at the Pontedera site.Moreover, a national trade union agreement at the end of 2011 established a private health insurance fund (Métasalute) for metal and steel processing workers in Italy; the Company started paying its contributions to the fund in 2012.Membership of the plan, which was initially on a voluntary basis, has become automatic for all Group employees since October 2017.

The scheme also includes health benefits/services for employees:

At Pontedera, the company medical centre for employees has specialists (an optician, an orthopaedic specialist, a lung specialist, a dermatologist and an ENT specialist) for consultations during working hours;

At Noale/Scorzè and Mandello del Lario, all employees are entitled to paid time off for specialist consultations outside the company and for clinical analyses.

All sites also offer employees vaccinations free of charge.

Vietnam

In Vietnam, trade union representatives at a company level (selected by a company trade union committee) are tasked with protecting employees, helping them to understand aspects concerning labour regulations and company policies, and providing economic support for some company initiatives benefiting employees.

In particular, the current Trade Union Committee, elected in February 2014 and comprising 15 members who will remain in office for 6 years, made a valuable contribution in 2018, having sponsored and assisted the company in a number of initiatives to bolster employee motivation. The main events are outlined below, following on from those organised last year:

"Safety Riding Contest”, lasting half a day, which promoted employee awareness on the subject of safety. It was also presented to local authorities to emphasise the company’s strong focus on safety issues;

The 6-month “Road Safety” campaign (starting in September 2018 and scheduled to end in March 2019) to increase awareness of safe road use, for all employees. This campaign, with specific monthly initiatives, was also organised as most employees engaged in manual activities travel to work by motorcycle/scooter;

The “Nutrition Day” for employees’ children: in June, paediatric doctors met with employees to provide advice on the nutrition and health of their children. The half-day event was attended by approximately 300 children, mainly the sons and daughters of blue-collar workers. In particular, the children, who were entertained with games, entertainers and small gifts, were examined by 12 national nutrition doctors;

the “Piaggio Vietnam Summer Vacation” lasting 3 days in August, when employees and their families were given a contribution to spend 3 days’ holiday at a location selected in conjunction with the Company and trade union representatives;

an “Outing day”, a team-building event lasting one day, held in August for all employees.

A company football tournament was also held, to increase team spirit through sport.No strikes were held in 2018.

India

The Indian subsidiary has always based trade union relations on cooperation, seeking to establish an ongoing dialogue and exchange of views. The company and the trade unions acknowledge that it is in the mutual interest of employees and the Piaggio Group to guarantee and pursue greater productivity and higher quality of products, as well as ensuring excellent factory operating process function, all of which enable the company to remain competitive in an environment like the automotive sector which, even in India, constantly demands innovation in its work processes.

In India, trade unions have a two-tier structure: one at company level and the other at local/area level; this structure is also replicated at the Indian subsidiary, where the trade union system comprises a company trade union committee with Piaggio worker representatives, and a central trade union committee, which is the highest hierarchical level, with members selected by the trade union. Currently, the company trade union committee (appointed in November 2018 and with an annual term of office) is made up of 8 members.

At the Indian subsidiary, a collective bargaining agreement is negotiated and signed at regular intervals. The agreement, which expired in July 2013, was renegotiated and renewed in March 2018, following trade union negotiations without any episodes of conflict. The agreement is valid for four years.

reaching and achieving the manual labour productivity levels established in the new agreement. Based on these indicators, levels of manpower connected with varying levels of production were established;

implementation of a flexible temporary labour model. The use of temporary blue-collar workers is related to production volumes based on pre-established ratios;

adopting other provisions in the agreement concerning salaries and other aspects (regulations on collective closures, the introduction of automation processes, flexibility in operating roles, training, etc.);

maintaining and improving positive and cooperative relations with workers and trade unions

guaranteeing compliance with labour laws, including following new government regulations (e.g. on the use of apprenticeships, regulations concerning pension funds, etc.);

employee engagement to improve business climate and, accordingly, employee motivation. In line with this approach, Piaggio organised numerous activities to engage its employees, including sports competitions, health checks-ups and prevention initiatives, initiatives to raise awareness of environmental issues and the purchase of books for the children of employees.